This is a lawsuit under the FOIA, 5 U.S.C. § 552, in which
plaintiff is seeking documents relating to the criminal
investigation of the Reverend Sun Myung Moon ("Reverend Moon")
and Mr. Takeru Kamiyama ("Mr. Kamiyama") for alleged violations
of the federal tax laws.

By a letter dated March 7, 1997, Heggestad requested all
documents relating to the decision to prosecute in the case of
United States v. Moon, et al., including but not limited to
five documents specifically listed in the request: (1) the Tax
Division's initial memorandum dated August 4, 1981, recommending
that prosecution be declined; (2) the memorandum dated August
17, 1981, prepared by a Senior Reviewer in the Criminal Section
of the Tax Division concurring with the August 4, 1981
memorandum; (3) the August 20, 1981 decision of the Chief of the
Tax Division's Criminal Section that prosecution should be
declined; (4) the August 21, 1981 recommendation by Mr. Martin
Flumenbaum, Assistant U.S. Attorney for the Southern District of
New York, to Acting Assistant Deputy Attorney General for the
Tax Division that Mr. Kamiyama and Reverend Moon be prosecuted;
and (5) the September 10, 1981 memorandum decision of the Acting
Deputy Assistant Attorney General for the Tax Division, Mr.
Gilbert Andrews ("Andrews"), approving criminal proceedings.
Complaint ¶ 5; Ferrel Decl. ¶ 3. On August 27, 1997, the DOJ
responded to plaintiffs request by releasing three documents in
full, withholding five documents in part, and withholding two
documents in their entirety. Complaint ¶ 6; Ferrel Decl. ¶ 14.
These documents were withheld on the grounds that the materials
were exempt from disclosure under the FOIA pursuant to Exemption
3, in conjunction with Fed.R.Civ.P. 6(e) and 26 U.S.C. § 6103,
relating to confidential grand jury information; Exemption 5, in
conjunction with the attorney work product and deliberative
process privileges; and Exemption 7(C) relating to the
unwarranted invasion of the privacy of third parties. Complaint,
Attachment 2 (8/27/97 letter from Ferrel to plaintiff).

On November 14, 1997, plaintiff appealed the denial of his
request and cited three documents allegedly falling within the
scope of the request that had not been produced: (1) the August
17, 1981 Reviewer's concurrence in the August 4, 1981
recommendation that prosecution should be declined; (2) the
August 20, 1981 memorandum opinion by the Chief of the Criminal
Section, Stanley Krysa ("Krysa"), that prosecution should be
declined; and (3) an August 9, 1984 letter from the Assistant
Attorney General to Senator Orin Hatch regarding the Tax
Division's subsequent authorization to prosecute Reverend Moon
and Mr. Kamiyama. The August 9, 1984 letter to Senator Orin
Hatch ("Hatch letter") was not construed by the DOJ as falling
within plaintiffs March 7, 1997 FOIA request. Ferrel Decl. ¶ 3.
Plaintiff filed another FOIA request on May 4, 1998
for this letter. Id. On September 11, 1998, the Hatch letter
was released in part to plaintiff. Ferrel Supp. Decl. ¶ 5.

On September 15, 1998, the DOJ responded to plaintiffs July
23, 1998 FOIA request. Ferrel Supp. Dec. ¶ 3. The DOJ released
portions of three documents which contain tax return information
relating to Reverend Moon; this information was previously
withheld pursuant to 26 U.S.C. § 1603 in conjunction with FOIA
Exemption 3, but was released as a result of the power of
attorney provided for Reverend Moon. Ferrel Supp. Dec. ¶ 4.
Therefore, the lawsuit is moot with respect to page 7 of
document 1, the released portions of pages 2 and 3 of document
2, and the released portions of pages 2 through 5 of document
10.

II. APPLICABLE LEGAL STANDARD

A. The Freedom of Information Act

Plaintiff's claims arise under the FOIA, 5 U.S.C. § 552. The
FOIA provides a rule of general disclosure by government
agencies upon request. Mandatory disclosure enables the public
to gain access to government information so that it can review
the government's performance of its statutory duties, thereby
promoting governmental honesty. United States Dep't of Defense
v. Fed. Labor Relations Auth., 510 U.S. 487, 495-96, 114 S.Ct.
1006, 127 L.Ed.2d 325 (1994). Accordingly, district courts have
the authority to order the production of agency records where
the agency improperly withholds their records. United States
Dep't of Justice v. Tax Analysts, 492 U.S. 136, 141, 109 S.Ct.
2841, 106 L.Ed.2d 112 (1989); see also Katz v. Nat'l Archives &
Records Admin., 862 F. Supp. 476, 478 (D.C. 1994). However, an
agency may withhold agency records which fall under one of the
nine enumerated exemptions under the FOIA. See
5 U.S.C. § 552(b). The government has the burden of justifying its
withholding of documents pursuant to one or more of these
exemptions. Katz, 862 F. Supp. at 478.

FOIA Exemption 5 protects "interagency or intra-agency
memorandums or letters which would not be available by law to a
party . . . in litigation with the agency."
5 U.S.C. § 552(b)(5). This exemption has been construed to encompass
documents normally privileged in the civil discovery context.
NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149, 95 S.Ct.
1504, 44 L.Ed.2d 29 (1975). Thus, Exemption 5 has been held to
include documents which are protected by the deliberative
process privilege, Russell v. Dep't of the Air Force,
682 F.2d 1045, 1048 (D.C.Cir. 1982), as well as documents which
constitute attorney work-product. Coastal States Gas Corp. v.
Dep't of Energy, 617 F.2d 854, 865 (D.C.Cir. 1980).

Exemption (b)(5) shields from the mandatory
disclosure requirement of the FOIA the deliberative
process that precedes most decisions of government
agencies . . . Thus, the exemption protects not only
communications which are themselves deliberative in
nature, but all communications which, if revealed,
would expose to public view the deliberative process
of an agency.

For a document to be covered by the deliberative process
privilege, two requirements must be satisfied. First, it must be
predecisional, that is, "antecedent to the adoption of agency
policy." Jordan v. Dep't of Justice, 591 F.2d 753, 774
(D.C.Cir. 1978) (en banc), overruled in part on other grounds,
Crooker v. Bureau of Alcohol, Tobacco, and Firearms,
670 F.2d 1051 (D.C.Cir. 1981) (en banc). To show that a document is
predecisional, the agency need not identify a specific final
agency decision; it is sufficient to establish "what
deliberative process is involved, and the role played by the
documents at issue in the course of that process." Coastal
States Gas Corp., 617 F.2d at 868.

Second, the document must be deliberative in nature, i.e.,
it must be "a direct part of the deliberative process in that it
makes recommendations or expresses opinions on legal or policy
matters." Vaughn v. Rosen, 523 F.2d 1136, 1143-44 (D.C.Cir.
1975). Deliberative documents frequently consist of "advisory
opinions, recommendations and deliberations comprising part of a
process by which governmental decisions and policies are
formulated." NLRB, 421 U.S. at 150, 95 S.Ct. 1504.

The determining issue here is what constituted the final
decision in this case: the decision of the Chief of the Criminal
Section of the Tax Division, Krysa, to decline prosecution; or
the decision made by the Acting Deputy Assistant Attorney
General in the Tax Division, Andrews, authorizing prosecution.
If Andrews made the final decision, then all documents prepared
prior to the adoption of this decision are exempt from
disclosure, because they are prepared by people without final
decisionmaking authority, they were prepared prior to the
adoption of a final decision, and they are part of the
give-and-take of the decision-making process. On the other hand,
if Krysa made the final decision, then both his decision and
Andrews' subsequent decision would likely be outside the
protection of Exemption 5.

Here it is undisputed that both the IRS and the United States
Attorneys' Office had already recommended prosecution, while the
line attorney, reviewer, and Chief of the Criminal Section of
the Tax Division recommended against prosecution. Defendant
claims that the ultimate authority for making the final decision
regarding prosecution in this type of "exceptional case" was
vested in the office of the Assistant Attorney General of the
Tax Division, not the Chief of the Criminal Section of that
Division. Third Ferrel Decl. at ¶ 4 and Exhibit A thereto at 2
(August 9, 1984 letter to Senator Hatch). This case was
exceptional, according to defendant, because it was a high
profile case and because there was an initial conflict between
the IRS's and the United States Attorney's recommendations and
the recommendations of the Tax Division attorneys assigned to
the case. Third Ferrel Decl. ¶ 4. Tax Division Directive No. 37
¶ 4(a) and Tax Division Directive No. 15 ¶¶ 4(a) and (d)
authorize the Assistant Attorney General to make final decisions
in exceptional cases.

While the Court recognizes that Directive 37, which supersedes
Directive 15, permits the Criminal Chief to make a final
decision regarding prosecution in certain instances, the Court
notes that there is nothing in the delegation directives that
precludes the Chief of the Tax Division's Criminal Section from
forwarding sensitive cases to the Assistant Attorney General of
the Division for a final decision. Directive No. 37 merely
identifies circumstances in which the Assistant Attorney General
has authorized his subordinates to make decisions on behalf of
the agency; there is no prohibition against the Assistant
Attorney General making final decisions himself. Moreover, it is
well established that the head of an agency retains the
authority to make final decisions for the agency even if he or
she delegates the authority to make these decisions to his or
her subordinates. See, e.g., Knight v. United Land Ass'n,
142 U.S. 161, 176-82, 12 S.Ct. 258, 35 L.Ed. 974 (1891) ("As a
general proposition of administrative agency law, the head of an
administrative agency has the power to review and revise acts of
subordinates where, as here, the powers in question are
vested in the subordinate under the supervision and direction of
the superior or the power to administer is vested in the
superior."); see also Morrow v. Clayton, 326 F.2d 36, 45-46
(10th Cir. 1963) (holding that the Secretary of Agriculture and
his subordinates had the authority to review and change lower
subordinates' actions, despite the delegation of authority over
the subject matter to the lower subordinates). Thus, the fact
that a subordinate was authorized to take certain actions does
not deprive his superiors of their authority to make final
decisions for the agency in certain cases.*fn6 Therefore,
there is no basis for plaintiffs claim that the Assistant
Attorney General's prosecution decision could not have been the
"final decision" in this case because he lacked the authority to
make such a decision.

All evidence in the record supports the conclusion that the
Assistant Attorney General made the final decision regarding
prosecution in this case. See Decls. of Krysa and Ferrel. In
fact, the Hatch Letter explicitly states that the case was
forwarded by the Criminal Chief to the Deputy Assistant Attorney
General for a final decision. See Hatch Letter (Exhibit A to
Def. Reply) at 2-4. Plaintiff has offered no evidence to rebut
the contention that the Assistant Attorney General made the
final decision here. Accordingly, the Court finds that the final
agency decision in this case was made by Andrews, Acting Deputy
Assistant Attorney General for the Tax Division.*fn7

Since the Court has now determined that the final agency
decision in this case was that of the Acting Deputy Assistant
Attorney General, all documents prepared by the agency with
regard to this prosecution prior to the final decision of
Andrews to authorize the prosecution of Reverend Moon and Mr.
Kamiyama would be considered predecisional and allowing release
of these memoranda would violate the intent of the deliberative
process privilege. In Firestone Tire & Rubber Co. v. Dep't of
Justice, 81-2 U.S. Tax Cas. (CCH) ¶ 9670, 1981 WL 1870 (D.C.
1981) (holding that memoranda prepared by various levels of
staff lawyers within the Department of Justice, Tax Division and
by an Assistant United States Attorney were exempt from
disclosure under FOIA Exemption 5), this court explained:

Taking the documents as a whole, it is apparent that
their disclosure would unquestionably chill the kind
of frank prosecutorial evaluations of tax cases in
the future that these memoranda evince . . .
Prevention of such "demoralization" of the litigative
process is a critical function of the traditional
attorney workproduct privilege . . . Congress
intended that documents like these, which amount to
opinion work-product, be protected from disclosure
under FOIA.

Id. at *2. Therefore, all decisions made prior to the Acting
Deputy Assistant Attorney General's decision in this case would
be covered by the deliberative process privilege.

The prosecution memoranda at issue here were created as an
integral part of the Tax Division's investigation and its
decision-making process with regard to whether or not to
prosecute Reverend Moon and Mr. Kamiyama. These documents
contain recommendations of the IRS, the United States Attorney
and the Tax Division; review notes; and letters and memoranda
concerning the handling of the case. Ferrel Decl. ¶ 15. This
material is precisely the type of information universally held
to be attorney work-product in the context of civil
discovery.*fn8 Tax Analysts, 117 F.3d at 620 (attorney
workproduct privilege protects "any part" of memoranda prepared
in anticipation of litigation).

Select portions of two paragraphs of the August 9, 1984 letter
from Robert A. McConnell to Senator Orin G. Hatch have been
redacted pursuant to Exemption 5, because defendant claims that
they contain information protected by the deliberative process
and attorney work-product privileges. Second Ferrel Decl. ¶ 5
and Exhibit 1 thereto.

Plaintiff claims that this letter is not covered by Exemption
5 because it was prepared after the Moon case had concluded.
However, the fact that the final decision to prosecute was made
and the litigation was concluded prior to the date of the Hatch
letter does not remove this information from Exemption 5 and the
attorney work-product privilege. Federal Trade Comm'n v.
Grolier, 462 U.S. 19, 103 S.Ct. 2209, 76 L.Ed.2d 387 (1983)
(holding attorney work-product was exempt from disclosure under
FOIA Exemption 5 even after the case was dismissed and
litigation terminated by the FTC). In fact, the Supreme Court
has held that "under Exemption 5, attorney work-product is
exempt from mandatory disclosure without regard to the status of
the litigation for which it was prepared." Id. at 28, 103
S.Ct. 2209.

The defendant is withholding portions of document 1 pursuant
to FOIA subsection (b)(7)(C). Subsection (b)(7)(C) exempts from
disclosure records or information compiled for law enforcement
purposes to the extent that disclosure "could reasonably be
expected to constitute an unwarranted invasion of personal
privacy."

To fall within the scope of FOIA Exemption 7(C), the records
must have been compiled for law enforcement purposes. See
Church of Scientology Int'l v. IRS, 995 F.2d 916 (9th Cir.
1993). To determine whether records were compiled for law
enforcement purposes, the Court must examine the agency itself
to determine whether the agency may exercise a law enforcement
function. Id. at 919. If the agency has the requisite law
enforcement mandate, the court will apply a balancing test to
determine if the public interest in disclosure outweighs the
individual privacy interests that would suffer from disclosure.
Id. at 919-20.

It is well established that the IRS has the requisite law
enforcement purpose to fall within the scope of FOIA Exemption
7(C). See, e.g. Lewis v. IRS, 823 F.2d 375, 379 (9th Cir.
1987); Church of Scientology, 995 F.2d at 919. Moreover, in
this case, the Court is satisfied that the privacy interests of
the grand jury witnesses greatly outweigh the public interest in
disclosure.*fn12 See U.S. Dept. of Justice v. Reporters
Committee for Freedom of the Press, 489 U.S. 749, 780, 109
S.Ct. 1468, 103 L.Ed.2d 774 (1989) (third party's request for
law enforcement records or information about a private citizen
can reasonably be expected to invade that citizen's privacy).
The information withheld pursuant to subsection (b)(7)(C)
consists of records created during the course of a grand jury
investigation to explore the allegations of possible violations
of federal law. Ferrel Decl. ¶ 20. Information was withheld
pertaining to the identities of certain grand jury witnesses.
Id. The privacy interests of these individuals clearly
outweighs any public interest in the information. Therefore,
this material was properly withheld pursuant to Exemption 7(C).

IV. CONCLUSION

For the foregoing reasons, the Court will grant defendant's
Motion for Summary Judgment and this case will be dismissed with
prejudice. An order will accompany this opinion.

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